Bad debt expense is not debited when a company writes off an account receivable when using the allowance method because the company has already recorded the Bad Debt Expense as an adjusting entry.

Question

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When using the allowance method, the company records an adjusting entry to the Bad Debt Expense account at the end of each accounting period to estimate the amount of uncollectible accounts. When an account receivable is eventually deemed uncollectible and written off, it is simply a reduction of the Accounts Receivable account and a corresponding decrease to the Allowance for Doubtful Accounts account. Therefore, Bad Debt Expense does not need to be debited again since it was already accounted for in the adjusting entry.

Bad Debt Expense Is Not Debited When a Company Writes